Cartels Can Only Exist

question 11

Multiple Choice

Cartels can only exist:

• A) in oligopoly markets.
• B) when products are homogeneous.
• C) when products are not homogeneous.
• D) in countries where they are legal.
• E) when demand curves are perfectly inelastic.

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Definitions:

IRR

The discount rate at which the net present value of all the cash flows from a project or investment equals zero.

Mutually Exclusive Investment

This refers to a situation in corporate finance where choosing one investment option prevents the selection of another due to constraints such as capital or projects serving the same purpose.

Net Present Value Profiling

A process of determining the value of a series of cash flows by discounting them to the present value to evaluate the profitability of an investment.

Operational Ambiguity

Uncertainty in a firm's operational strategies and processes, which can affect its efficiency and ability to execute its business model effectively.